A former Siemens executive, Johannes Feldmayer, acknowledged Wednesday that he paid tens of millions of euros (dollars) to a small trade union that supported the management's goals. Feldmayer, who faced his first day in court on charges of breach of trust and tax fraud, said the German industrial group "had saved money" because the AUB union had worked in favour of accords that increased worker flexibility.
Some 35 million euros (51 million dollars) were allegedly paid from 2001 to 2006 to AUB president Wilhelm Schelsky, who is also on trial for the same charges plus embezzlement.
Schelsky is accused of having used much of the money to buy automobiles and antiques for himself. Siemens' support for AUB was also allegedly aimed at creating a counterweight to the powerful IG Metall union. Feldmayer was arrested last year while still a member of the Munich-based giant's executive board and spent nine days in police custody.
He said Wednesday that he had never notified other board members of the arrangement with Schelsky, but added: "Maybe it was a subject we should have discussed, given its political impact." The affair is the second major scandal to rock Siemens, which makes everything from nuclear power stations to trains and light bulbs and employs some 400,000 people world-wide.
The 161-year-old firm is also engulfed in a massive slush-fund scandal, in which the sprawling conglomerate has acknowledged that up to 1.3 billion euros (2.8 billion dollars) may have been used illegally to win foreign contracts.
Siemens found the practice was widespread across its numerous divisions. Prosecutors are investigating around 300 people in connection with the affair. It led to the resignation of a string of top executives, including chief executive Klaus Kleinfeld and his long-term predecessor and chairman of the board Heinrich von Pierer.
Comments
Comments are closed.